Historical accumulated depreciation examples—Fixed Assets Management
If your company enters historical accumulated depreciation manually, Fixed Assets Management adjusts depreciation schedules to ensure the following:
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The total of all historically posted periods equals the amount that you provided.
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The total depreciation across all periods equals the asset’s depreciable cost.
To achieve this, Fixed Assets Management adjusts depreciation in the last historically posted period and the first non-historical period. If necessary, other periods are also adjusted.
The following examples show how different custom historical depreciation amounts affect the depreciation schedule.
Examples
All examples use the following scenario:
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Go-live date: June 2nd, 2024
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Asset cost: £1,100
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Salvage value: £100
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Depreciable cost: £1,000
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In-service date: April 5th, 2024
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Depreciation method: Straight-line
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Useful life: 4 months
If your company is configured to calculate historical accumulated depreciation automatically, the schedule amounts are the same as a non-historical asset. The only difference is that periods with scheduled posting dates before the go-live date are considered historically posted.
The system calculates £500 for the total historical depreciation, which is allocated to periods 1 and 2.
| Period | Scheduled posting date | Depreciation amount (£) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 250.00 | Historically posted |
| 2 | May 31st, 2024 | 250.00 | Historically posted |
| 3 | June 30th, 2024 | 250.00 | Not posted |
| 4 | July 31st, 2024 | 250.00 | Not posted |
The user-provided amount is £0. Periods 1 and 2 are reduced to zero, and period 3 is increased to compensate.
| Period | Scheduled posting date | Depreciation amount (£) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 0.00 | Historically posted |
| 2 | May 31st, 2024 | 0.00 | Historically posted |
| 3 | June 30th, 2024 | 750.00 | Not posted |
| 4 | July 31st, 2024 | 250.00 | Not posted |
The user-provided amount (£50) is significantly less than the system-calculated amount (£500). Period 1 is reduced to zero, period 2 is also reduced, and period 3 is increased to compensate.
| Period | Scheduled posting date | Depreciation amount (£) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 0.00 | Historically posted |
| 2 | May 31st, 2024 | 50.00 | Historically posted |
| 3 | June 30th, 2024 | 700.00 | Not posted |
| 4 | July 31st, 2024 | 250.00 | Not posted |
The user-provided amount (£400) is less than the system-calculated amount (£500). Period 2 is reduced and period 3 is increased to compensate.
| Period | Scheduled posting date | Depreciation amount (£) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 250.00 | Historically posted |
| 2 | May 31st, 2024 | 150.00 | Historically posted |
| 3 | June 30th, 2024 | 350.00 | Not posted |
| 4 | July 31st, 2024 | 250.00 | Not posted |
The user-provided amount (£600) is more than the system-calculated amount (£500). Period 2 is increased and period 3 is reduced to compensate.
| Period | Scheduled posting date | Depreciation amount (£) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 250.00 | Historically posted |
| 2 | May 31st, 2024 | 350.00 | Historically posted |
| 3 | June 30th, 2024 | 150.00 | Not posted |
| 4 | July 31st, 2024 | 250.00 | Not posted |
The user-provided amount (£800) is significantly more than the system-calculated amount (£500). Period 2 is increased, period 3 is reduced to zero, and period 4 is also reduced to compensate.
| Period | Scheduled posting date | Depreciation amount (£) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 250.00 | Historically posted |
| 2 | May 31st, 2024 | 550.00 | Historically posted |
| 3 | June 30th, 2024 | 0.00 | Not posted |
| 4 | July 31st, 2024 | 200.00 | Not posted |
The user-provided amount (£1,000) equals the asset’s depreciable cost. Period 2 is increased. Since depreciation is fully accounted for before the go-live date, the remaining periods are set to zero to compensate.
| Period | Scheduled posting date | Depreciation amount (£) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 250.00 | Historically posted |
| 2 | May 31st, 2024 | 750.00 | Historically posted |
| 3 | June 30th, 2024 | 0.00 | Not posted |
| 4 | July 31st, 2024 | 0.00 | Not posted |
The user-provided amount (£1,100) exceeds the asset’s depreciable cost ($1,000), so Fixed Assets Management prevents this scenario. Historical accumulated depreciation must be less than or equal to the depreciable cost.
